Written by Simon Ward, Partner

The Autumn Statement brought a much-needed air of economic and fiscal positivity. There was plenty for business owners and consumers to like in the quest for the elusive economic growth we’ve missed over so many years. Falling inflation and a (slightly) positive economic outlook for the next few years created the headroom for Jeremy Hunt to open the coffers (gently) in advance of an election.

The making permanent of the full expensing capital allowance should go some way to promoting investment and represents a serious approach to supporting growth. Equally, the cutting of National Insurance for all workers and the simplification of NI for the self-employed are welcome attempts to boost consumer confidence.

From a Midlands perspective, the creation of investment zones in both the West and East Midlands is a positive step – one might question why this hadn’t happened before!

So against the positive backdrop, it is worth reflecting on how what has been announced will impact the strategic M&A decisions of business owners. The major cloud on the horizon is the prospect of changes to Capital Gains Tax by a future government. The reality is that there are few votes in capital taxes and the prospect of equalising income and capital may well raise its head early in a Labour administration. We have written in the past about the gross iniquity of this – a tax on entrepreneurs and wealth creators is fundamentally wrong and should be avoided at all costs but that doesn’t mean it is not a real possibility.

For business owners who have dealt with Brexit, Covid and the myriad of other economic challenges over recent years, there should be a very real consideration of what next year might bring. An increase in capital taxes has to be a real risk and should be part of any exit/strategic planning.